RAMADAN BUKA PUASA 2015

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Monday, 28 September 2015

The Ringgit which was quoted at 4.4032 against the US dollar at 12.16pm, changed hands at 4.4058 at 12.46pm.

Ringgit weakens to new point at 4.4065 against greenback

Published: 28 September 2015 1:38 PM

The ringgit has breached the 4.4 mark against the US dollar. – The Malaysian Insider filepic, September 28, 2015.

The ringgit weakened against the US dollar after foreign investors retreated from emerging markets following the US Federal Reserve’s indication on a possible interest rate hike by end of this year.

The ringgit, which was quoted at 4.4032 against the US dollar at 12.16pm, changed hands at 4.4058 at 12.46pm. Earlier, the exchange rate touched a fresh level at 4.4065.

At the current level, the ringgit is a step closer to the 4.7125 level on January 9, 1998 before Bank Negara Malaysia pegged the ringgit to the US dollar at 3.8000 in September that year.

The ringgit’s depreciation was against the backdrop of foreign fund outflow from emerging markets last week.

Foreign funds sold ringgit assets amid a combination of factors like falling oil prices and Malaysia’s political uncertainties as state-owned 1Malaysia Development Berhad (1MDB) undergoes investigation.

Reuters quoted Federal Reserve Chair Janet Yellen as saying last Thursday she expected the US central bank to begin raising interest rates later this year as long as inflation remains stable and the US economy is strong enough to boost employment.

“Investors classified as ‘foreign’ sold heavily on Bursa last week. Foreigners offloaded RM1.27 billion net in the open market (ie excluding off-market deals) despite it being a holiday-shortened week.

“It was only the fifth week this year that the amount had exceeded RM1 billion. That more than reversed the amount of inflow recorded in the preceding week of RM685 million, implying that any fund making its way to Malaysian equity currently is highly volatile in nature.”

The ringgit’s strength tracks crude oil prices as the commodity forms a crucial portion of the Malaysian economy and government’s income.

1MDB has been in the spotlight. Bank Negara Governor Tan Sri Zeti Akhtar Aziz recently said the ringgit would recover once issues relating to 1MDB were resolved.

1MDB expressed disappointment at Zeti’s comment that 1MDB had been a major factor contributing to the weakening ringgit.

1MDB said the ringgit had weakened along with other currencies amid cheaper crude oil, expectation of higher US interest rates and concerns on slower growth in emerging economies. – The Edge Markets, September 28, 2015.

- See more at: http://www.themalaysianinsider.com/malaysia/article/ringgit-weakens-to-new-point-at-4.4065-against-greenback#sthash.OVVFnSRA.dpuf